-- Translation of advance text --

Mesdames et Messieurs,
Ladies and gentlemen,

Much has been said or written during the last few weeks in both Germanyand France about the other country. I have come to Paris today because I firmly believe that it is better to talk to rather than talk about each other.

I grew up in the Rhineland. Franco-German reconciliation was one of the formative experiences of my youth. I could still sense the deep divides which wars and supposed hereditary enmity had created between our parents and grandparents. Politically, I grew up in the Bonn Republic, where the strong will to reconcile with Francebecame the axiom of Germany’s foreign policy.

Today we have to counter the endless caricatures and myths about the other country which crop up on both sides of the Rhine with our firm and steadfast desire to stand shoulder to shoulder.

Let me look more closely at three of these myths about Germany.

First of all, there is the distorted image of a Germanywhich lacks empathy and solidarity in the current crisis.

We are not indifferent to the difficulties facing many people in the European Union in the light of the crisis. When, in some regions, one in two young people are unemployed, then that is much more than an economic problem. That erodes the self esteem of every individual. It thus also erodes the very foundations of our societies. Our European house can only stand on a firm basis if people all around our continent see a bright future for themselves and their children.

There are even those who claim that Germanyis benefiting from the crisis and therefore has no reason to help overcome it. Nothing could be further from the truth. In an interconnected Europe, we will only prosper on a durable basis if our neighbours’ economies are also flourishing. This is not only an expression of European solidarity. In fact, it is in our own interest. Even in the globalized world, Germanyis more closely interlinked with Belgiumthan with Brazil. However, it is our economic and political ties with Francethat are closer than those with any other country in the world.

Solving youth unemployment, which is of disastrous proportions in some countries, is the most urgent task of all. Better educational opportunities, better vocational training, swift investment via the Compact for Growth and European Investment Bank projects are now high on the agenda, also for the next European Councils. Europe’s young people need to feel our support today. I am pleased that together Germany and France will be providing key impetus here in the coming weeks.

Secondly, there is the myth that Germany’s economic success has been gained at the expense of the impoverishment of many sections of its own population. This argument does not stand up when you look at the realities of life in Germany. By implementing fundamental reform, we have created additional incentives to take up employment. Today the number of people in work paying social insurance contributions in Germany has risen to a record level – despite the unfavourable demographic trend. An economic policy which creates new jobs is also the best social policy.

Today, we in Germany are debating how we can ensure that those in full-time employment earn a decent living. We are conducting this debate with the social market economy model in mind. According to this guiding principle of Germany’s economic policy the business community’s creativity and dynamism stimulate growth, but social cohesion is also considered to be vitally important. Allowing sections of our society to fall into a precarious position runs contrary to the principles of our social market economy. The substantial collective agreements of the last few months are a clear indication that workers in Germany are sharing in their companies’ success. The top priority of our policies is to uphold this model with its balance between the creation of economic prosperity and social security in the age of globalization.

Thirdly, there is the image of a Germany which is said to adhere to a “dogma of austerity” and to be at the very least indifferent and perhaps even opposed to new growth.

The word “austerity” does not even exist in the German language. In Germany, as in any other country, our top priority is promoting new and, at the same time, sustainable and lasting growth. However, we have come to fully realize that the debt-making policies in Europe, which have got out of hand and have been dramatically accelerated by the financial crisis, have crossed a critical threshold. They have damaged our credibility. And in the long run, they will also diminish our independence and sovereignty. Excessive debt levels will make politicians the slaves of the financial industry.

Those who say that the policy of gradually consolidating our budgets, a policy adopted together by all Europeans, caused the ongoing crisis have therefore misjudged the situation. Compliance with agreed stability criteria is an indispensable prerequisite for creating new confidence, new investments and new growth.

Continuing the policy of running up debts would cement unemployment and economic stagnation for years to come in some parts of our continent. It would place an even more oppressive burden on Europe’s young people. It would undermine the solidarity among generations, thus jeopardizing the future of our social model.

Reforms aimed at boosting competitiveness are therefore not gnawing away at the roots of our social market economy, as some people are currently claiming. On the contrary, we owe it to Europe’s young people to carry out these reforms so that they will no longer be denied the chance of a bright future by closed labour markets. They will prepare the groundwork for new prosperity and new jobs. That is anything but dry theory. This has been the heartening experience of many of our neighbours in Central Europe, in Scandinavia and in the Baltic states during the last few years.

We in Germanynot only believe that these reforms are essential. We know that they are possible.

In early 2005, there were more than five million people unemployed in Germany. Today there are under three million. However, we also know that reforms need time to take effect and that they can put our political systems to a severe test. That is why we are standing shoulder to shoulder with our partners and neighbours and are providing support measures and guarantees to the tune of several hundred billion euros. Germanywill continue to demonstrate its solidarity.

It is our explicit aim to help ensure that all member states of the eurozone and the EU find a path to sustainable growth as quickly as possible. In addition to urgent structural reforms, we are working on the swift implementation of the Compact for Growth, which was established thanks to an initiative put forward by the French Government; on the completion of our single market; on investments in research and development; on the better use of European resources from project bonds and structural funds which have not yet been exhausted. We are furthermore negotiating comprehensive new economic agreements with our partners in the world, first and foremost the US, which will open up additional sources of growth.

The threefold objective of sound budgeting, solidarity, and growth through reforms is not a dogma, it is not a German obsession, and above all it is not a German “diktat”. It is the consequence of past mistakes which we are rectifying and challenges of the future which we have to master.

This brings me right to the heart of the challenges facing Europe today. If we look beyond the shores of our own continent, we see a world undergoing sweeping change. The balance of power is shifting at breathtaking pace. China is growing at a speed that generates the economic strength of Spainevery twelve months. If we chose to distance ourselves from globalization, we would soon be impoverished and nothing more than a pawn in the hand of the emerging powers.

Some say Germany has too good a competitive position. It would only need to up purchasing power by increasing wages and social benefits, then the imbalances in the eurozone would be gone in a flash and everything would be great.

That might ring true for those who see Europe as a closed system. But it is a long time since that has been the case. We are part of a globalized world where we must be able to have our say, hold our own and be competitive. That is why we should tap the creativity of our people, their talents, their hard work and their energy to ensure we can survive in the competition for the best ideas, but also for values and interests.

Above and beyond our businesses, we have such a lot to offer in this competition. Europe has always been more than an internal market and a free trade area. And today it is so much more than a common currency.

Above all else, Europe is a community of shared culture and values. The shared values are the foundation on which this Europe stands. They are the fruit of the Enlightenment, the fruit of the revolutions for freedom in 1789 and 1989. The ideal of liberty, equality and fraternity to this day makes up the defining core of our societies. It gives our lives meaning and gives us a sense of identity. These ideals and what we have built on them in Europe have an enormous attraction worldwide. This is something precious which we need to protect and propagate. It is our trump card in the globalized world. Thus we have every reason to enter this competition for values and social systems with our heads held high.

No European country can tackle this challenge alone. Franceand Germany may well be big in Europe, but in the world of tomorrow we are small. This is also what makes Europetoday a community in which we share our destiny. Franceand Germany are twins in this destiny.

If we consolidate Europe on the inside, it will emerge from this crisis stronger than before. For this absolutely pivotal task, Franceand Germany need to take the lead together. Without Franceand Germany, Europe cannot move forward.

President Hollande sketched out the direction just a few days ago. Franceand Germany need to forge a shared vision for Europe. We need to think about Europe after the crisis if we are to overcome it.

In France, “economic government” is the term used for dovetailing our fiscal, financial and economic policies more closely in future to ensure national distortions can no longer put the whole of Europe out of kilter. We Germans use the more staid term “coordination of economic policies” but what we mean is ultimately similar. What we are talking about is constantly reaching binding agreement where economic policy decisions in one country could have a far reaching impact on the EU as a whole.

What makes us strong together? Where does our growth come from and where do we need more European cooperation? That is what we should agree on first. Then we need to see how to organize this cooperation in concrete terms. We need more integration in the eurozone without thereby creating new dividing lines in Europe.

With their share of 47%, France and Germany are together shouldering almost half of the European Stability Mechanism (ESM). We should think together about how we want to gradually develop this further into a European Monetary Fund, an EMF.

Part of the vision of a political union as proposed by President Hollande is that Europe’s citizens can influence the decisions directly affecting them. The democratic dispute at national and European level needs to be moved to the heart of political decision-making. This is the only way of countering the threat that the European idea itself becomes the target of protests and meets with rejection. Part of the process is that we define more precisely where we need more Europe and in what fields Brussels should exercise careful self restraint.

Europe has changed, as has the world around us. But Franco-German cooperation amongst equals remains a sine qua non if our continent is to have a bright future.

If we see our neighbours without the caricatures and bear in mind our very different cultural, political and economic traditions, then we have a clear picture of what the Franco-German understanding is actually all about. We are not talking about automatic harmony. Franco-German cooperation is a modus operandi, one for moving Europe forward to benefit both our own nations and our neighbours. It is not something exclusive but provides impetus for European solutions together with our partners. To be successful, this method needs a resolute will to balance out interests. This is a lesson learnt in the 50 years since the Élysée Treaty was signed. I am confident we will also manage this in the future – in fighting unemployment, in the urgent task of developing a common energy policy and also in foreign and security policy which must hold its own in our unsettled neighbourhood and beyond.

It is now up to Germany and France, the heart of the European Union. The wise words spoken by Jacques Delors have not lost their validity: “cette relation franco-allemande est un des arbres de vie de l’Europe”.

We have a responsibility.

For Germany, Europe is not one political option among several. Germany can only have a bright future with a strong, self confident France at its side.

I have been close to France since I first visited this country as a young boy. I believe in a Francethat shakes off the shackles of pessimism. A Francethat believes in its future and sees change as an opportunity. I believe in a Francethat uses its extraordinary strengths to help shape Europe and the world of tomorrow.

Germanyneeds France. Germany needs a strong France. Without a strong France there can be no strong Europe. Without a strong Europe there can be no bright future for Germany. Germanyneeds Europe. Germany wants Europe.

Il n’y a pas de « plan B » pour l’Allemagne.